Business sector's future role in peace process

Nihal Fonseka provides some insights into the business sector's once and future role in the peace process, to LMD.

Why has the business community remained somewhat silent, recently, about the escalation of the conflict in Sri Lanka? The current issue of LMD - out now - examines this very topical issue, in an exclusive interview with the Chairman of the Colombo Stock Exchange, Nihal Fonseka.

The chief of the bourse said: "I think different reasons apply to different people. Unfortunately, a few think the escalation of violence is also a good business opportunity.

Some others, including myself, feel that an escalation of violence was inevitable because a mere ceasefire - without progress on substantive political and economic issues in the long term - was, in any event, unsustainable. Yet others feel that after several decades of exposure to violence, and having perhaps been victims in some way, the only solution is a military one.

Another reason is that while business is affected by the escalation of violence, for the most part, the fallout is not personal: it is not the business community's children who die on the battlefront - so, life goes on relatively unchanged at a personal level for the business community. Their concern is not a personal one."

LMD's - probes further: could the business community play a more significant role in bringing about a peaceful end to the conflict? Fonseka said "The business community has not leveraged its position as employers and taxpayers, to get the people to rally round its point of view. Yes, the business community can play - and could have played - a bigger role in bringing about a peaceful end to the conflict.

That role should have been expressed in deed, rather than in words. Immediately after the ceasefire, the business community should have invested heavily in the North and East to bring about sustainable improvements in the living standards of the people. In fairness to the business community, it should have been supported by the Government and the international community to mitigate the political risks relating to such investments - which did not happen."

Fonseka, who is also the Chief Executive of DFCC Bank, said "If we get another window of opportunity, I hope that the business community - supported by other key players - will play the investment role required of it."

Speaking about Sri Lanka's Foreign Direct Investment (FDI) shortfall [the island-nation is likely to attract US$ 500,000 in FDI this year, which falls far short of the target of around US$ 1 billion], this banker said "I don't think Sri Lanka has ever attracted US$ 1 billion in FDI.

We should have a target, but I don't think just throwing out numbers is of any value. We sometimes lose sight of the fact that there is stiff competition with other countries when attracting FDI. It is insufficient for us to merely project our macroeconomic position, while revealing what we offer to investors.

FDI cannot be attracted on an isolated set of factors. We should be competitive in relation to other investment destinations."